The REAL cause of the ammunition shortage

The ammunition shortage has been quite a topic in the news and forum posts for quite some time now and it is interesting to read the many opinions of what is causing it. All my life I have analyzed things for a living to determine why they are not working correctly and, I might add, I am pretty good at it. This is going to be a somewhat lengthy post but I hope that you will enjoy reading it.

The ammunition shortage, here in Southern California, began to get quite serious in October of 2008. By November, ammo was almost impossible to find. Rim-fire, shotgun and large rifle ammo was still readily available. All of the display handguns in the in the showcases of the stores were wiped out (with the exception of some revolvers and the exotic, high-priced, hand-held cannons such as the Desert Eagle and S&W 500 Mag). Some friends of mine were actually panicking because they could not find any ammo for their weapons.

I searched on line and found several opinions as to why this was happening (Obama, the democrats, restriction of ammo purchases, hoarding, metal shortages and pricing etc).

I had a planned trip to Southern Utah for the graduation of a nephew so I figured I would use that opportunity to purchase some ammunition while I was there since they don’t have the population density that we have here. After all, Southern Utah is full of guns and ammo based on my past visits there.

I stopped at a Wal Mart in Richfield, Utah. The last time I was there they didn’t even have a Wal Mart. I went to the counter at sporting goods department and asked the fella behind the counter if he had any 45ACP. He looked at me and said “I haven’t seen any center-fire pistol ammo here for at least 90 days.” He claimed that if anything showed up it was snatched up the same day.

Needless to say, I became concerned that this was, truly, a nation-wide problem. I went to the Ace Hardware store to see if they had any ammo. The same shortage existed there. I was now becoming quite concerned and figured I would try one more place. Before I tell you about this place, I need to share with you an interesting story about it that I experienced about 3 years ago.

When visiting my brother-in-law in Salina, Utah about 3 years ago, he had to go to the Ford dealer in Richfield to get a part for his truck. The name of the dealer was “Jorgensons Ford and Gun Shop” (I’m not making this up). While he was looking up his replacement part I walked over to the “gun shop” part of the store. They had an impressive display of handguns and rifles including a comprehensive stock of “assault” rifles.

In the locked display case was a Colt Sporter with what appeared to be an 8” barrel with a price tag of $3,500. I commented to the guy behind the counter that this was an unusually high price and certainly illegal due to the length of the weapon. He asked me “Do you know this weapon?” at which I responded “Yes I do.” He removed it from the locked case and handed it to me. He then asked me to move the fire/safe selector from one end to the other. It stopped half-way between the selections. I asked “What is this?” He responded “3-round burst.” My first response was “You can’t sell this kind of stuff in the US!” His response was “You can sell anything in Utah.” I let it go at that. It would have been fun to have taken that Colt out and given it a few shots.

Back to the present:

Being that Wal Mart and the local hardware store were stripped on ammunition I figured I would go and visit the Ford/gun shop and see what they had. What the heck? You never know.

Apparently, this place got busted by the ATF (What did you expect?). When I entered the store they only had black powder rifles for sale. I asked if he had any .45ACP and his response was “What brand?”

They were fully stocked with just about any ammo you could want. In fact, his prices were lower than the ammo at Wal Mart! I stocked up on .45ACP, .357MAG and .223 PMC 55g.

My analysis: The ammunition shortage is totally caused by hoarding. The sales guy behind the counter said they had no problem keeping their shelves stocked. Any Wal Marts, guns stores or hardware stores near the interstates are going to be raided by passers-by if they are easily visible, especially if they are heavily traveled by Southern Californians. This place was off the interstate and no one would think of going to a Ford dealer to look for ammo. This is no different from what caused the gas lines in the early and late 1970’s.

If I were a greedy, opportunistic person I would have purchased half of his inventory and brought it back home to sell it at 3 or 4 times what I would have paid for it.

As a matter of fact. In the middle of Bumf*ckia, they obviosuly dont have ashortage so those people are not missing their ammo. If you have the money why not buy the ammo their and drive from whence you came. Sell it to your friends for twice what you bought it for. You as the middle man did a great service to EVERYONE. The vendor sold a lot of ammo and made his profit for the day. The people you are selling to at home are getting ammmo, which they cant find normally and when they do it is four times the price you paid. They are getting ammo and a deal by buying from you at twice the price. Finally you make a tidy profit with which you can get more ammo and do it again, or use that capital for future business ventures...ot go buy yourself a new toy.

The phenomena you saw is not greedy bastards. Greedy bastards are just people. From the macro view you watched the results of a market system redistributing products to meet demand. It existed in quantity in an area that didnt need that much. Instead of some corporate big wig or government resource manager having to keep track of supply and demand everywhere and shunt trucks around to meet demand (which is inefficient and cant work well), the market through the vehicle of profit seekers automatically moves product from where there are surplusses to where there is a higher level of demand. Elegant really.

An interesting phenomena is the investors worried about the value of the dollar who have been diversifying by buying ammunition and other commodities that should maintain their value better than greenbacks.

This may be a good time to push hard for the repealing of import restrictions on surplus foreign ammunition. Like putting to bed the steel core ammo myth that it is "armor piercing" This would open up a huge flood of especially 7.62x39 onto the market. It wouldnt be the 90s again but it would get way cheap. Then the latest fad would be 7.62x39 ARs.

Good post...but I think you avoid the main question as to WHY this happened. People were (and still are) afraid of government regulations....with bills like HR45, microstamping and serial numbered cassing laws looming around the corner, people had a right to be afraid and start hoarding. Even police agencies, that called straight to the ammo manufacturers themselves, have had problems acquiring ammunition.

I've actually noticed a problem with ammunition in 2007. Common callibers like 5.56 were difficult to come by because the wars overseas had priority...the Russia slowed their exporting of 7.62x39 because Georgia was being a pain in the arse...after that, once Obama hit the primaries, people bought what they could WHEN they could.

So, in reality, I honestly don't think you can pinpoint one thing that caused ammo to become to scarce. I think it was an addition to politics, the wars, panic buying, greedy salesmen (like Cheaper Than Dirt) and new prospect buyers. Many people decided to make their first firearm purchases because of all the hype and media attention behind firearms and ammunition- which just simply added to fuel to the fire when it came to shortages.

Went to my local wallyworld this weekend. Still no ammo. Has not been any real inventory of ammo since the election. There was exactly two boxes of 7.62x39 at $27/box and two boxes of .40 caliber at $16/box/50rds.

Of course, they had all the Fudd ammo you could shake a stick at like .227 1/4mm LOL.

.40 in bulk, .45 ACP in bulk, found .380 auto with little effort at the next THREE stores (including the very 90gr Hornady rounds I've been dropped from backorder by both Cabelas and Sprotmans Guide from), bulk boxes of .223 and a few boxes of 7.62x39.

No 25-06 or .308 CXP3 rounds (they're one of the only .308 rounds that my PTR-91 likes) though, maybe next month.

In the locked display case was a Colt Sporter with what appeared to be an 8” barrel with a price tag of $3,500. I commented to the guy behind the counter that this was an unusually high price and certainly illegal due to the length of the weapon. He asked me “Do you know this weapon?” at which I responded “Yes I do.” He removed it from the locked case and handed it to me. He then asked me to move the fire/safe selector from one end to the other. It stopped half-way between the selections. I asked “What is this?” He responded “3-round burst.” My first response was “You can’t sell this kind of stuff in the US!” His response was “You can sell anything in Utah.” I let it go at that. It would have been fun to have taken that Colt out and given it a few shots.

My local Wal-mart has 9mm(100 rds $19.00)and .40 S&W(100 rds $26.00),.223,25-06,300 WIN,30-30,lots of shotgun.But you can only buy one box of each at a time per day.They will have 10 boxes of 100 rounds of 9MM and only sell you one box."To allow others to be able to buy some."

Ford and gun shop in Richfield? Hell,you ever been in Richfield...I'm surprized the local hamburger joint doesn't have a gun counter.Of course I can't brag much here in Carbon County!My local K-Mart hasn't sold any pistol rounds in the 14 years I've lived here.But then again,K-Mart here is a ghost town.

Sorry Riot, I did fail to answer the question completely. The ammo shortage is a perfect storm of events that spiked demand. Three years ago the surplus market started to dry up. The uber low priced 7.62x39 started to dry up. Additionally As the old warsaw pact weapons became higher priced and many people cycled through the war on terror and watched it on TV people became interested in the AR-15 and its sales boomed. From the old standbys schools like Gunsite and Thunder Ranch, training has exploded in the US with hundreds of schools teaching pistol and rifle shooting. All volunteer grassroots organizations like Appleseed have gone from a few shoots a year to hundreds of shoots across the nation. Appleseed alone has probably encourage the expenditure more .308 expenditure in the US aside from the military than any other single source. Police departments started taking training more seriously with nominally higher round counts. Since 2000, the number of states allowing CCW and the number of people with said permits has exploded. In 2003-2004 the army pulled its head out of its fourth point of contact and started requiring qualification twice a year instead of once. Every major branch in the army is running convoy live fires in their AIT. All deploying units now have to do live fires to go downrange. This combined with the tremendous consumption rate of forces in combat has lead to a state of affairs 18-24 months ago where ammo production was barely keeping up with demand, it looked normal since no one saw shortages, but it was there just waiting for a stressor.

Now flashforward to 2008. Uncertainty in the market is causing people to start buying ammo and firearms. Concerns about the elections causes a spike in sales. Myself and others bought guns in that time period for that reason and commented on the spike in prices (littel did we know what was to come). In NOV the sales took off due to widespread uncertainty over future firearms legislation. At first they were sportsmen who said "Oh sh*t" and bought those ARs they took for granted, shortly they were joined by a groundswell of first time gun owners. As the economic recession deepened they were joined by people new to the preparedness community that felt that trouble was in the air and they needed to be ready. There are also some off people diversifying through ammo that are not gun people. While there are not many of them they are investor types so they are buying Pallets of ammo as hedges against inflation.

Pro-Arms Podcast and some others have talked to ammo manufacturers and they are aware of the issue and are producing at full tilt. They think the problem will right itself in time and that it isnt worth building extra space in tehir factories, buying more machining, hiring extra workers if the demand that pays for it will vanish in a year or two. The companies are probably right, and if there is a way to make a buck off it, they a few small ammo companies that will take the chance to upgrade will profit off it.

Will teh good times return? I dunno. I think most of this ammo is being stored and not fired. If times get better or those individuals get desperate enough the ammo will get sold off eventually. Just as rising gas prices genuinely effected consumer choices and consumption declined, people will shoot less. If you sniff around the training websites, many are offering incentives to come shoot, reason is not that their tuition is too high. Hell $400 is a reasonable tuition for professional instruction for 2 days. But 1000 rounds of 5.56 on top of that plus airfare? Ouch. Appleseed has seen a dramatic shift from centerfire rifles at their events to .22 rifles with Tech-Sites. Curbs in demand and such will probably help stabilize the market.

What can I do as a consumer of ammunition? Not a lot right now. The best I can offer to you is to hedge against high prices. If you find a great deal, take it. Stack it deep. You should always have enough for contingency purposes. What we want to avoid is HAVING to buy ammo, that is how you get screwed price wise. If you shoot IDPA, USPSA or another pistol sport where you are going to consume a lot of ammo in competition and training you have to find the best deal you can and buy in bulk. If you think you are going to go to the store and get it every week you may be able to do it, but you are going to pay through the nose.
The problem with the hedge model is what if the shortage is almost over? What if you buy a metric f*ckton of ammo now and the prices drop afterwards and you bought all the ammo at inflated prices? THis is going to be a judgement call on your part.

My local Wal-mart has 9mm(100 rds $19.00)and .40 S&W(100 rds $26.00),.223,25-06,300 WIN,30-30,lots of shotgun.But you can only buy one box of each at a time per day.They will have 10 boxes of 100 rounds of 9MM and only sell you one box."To allow others to be able to buy some."

They had .40, too. Funny thing was that the 100rd "VALUE PACK" was more expensive than buying two 50rd boxes. It was that day's Moment of Zen.

Good post...but I think you avoid the main question as to WHY this happened. People were (and still are) afraid of government regulations....with bills like HR45, microstamping and serial numbered cassing laws looming around the corner, people had a right to be afraid and start hoarding. Even police agencies, that called straight to the ammo manufacturers themselves, have had problems acquiring ammunition.

I've actually noticed a problem with ammunition in 2007. Common callibers like 5.56 were difficult to come by because the wars overseas had priority...the Russia slowed their exporting of 7.62x39 because Georgia was being a pain in the arse...after that, once Obama hit the primaries, people bought what they could WHEN they could.

So, in reality, I honestly don't think you can pinpoint one thing that caused ammo to become to scarce. I think it was an addition to politics, the wars, panic buying, greedy salesmen (like Cheaper Than Dirt) and new prospect buyers. Many people decided to make their first firearm purchases because of all the hype and media attention behind firearms and ammunition- which just simply added to fuel to the fire when it came to shortages.

But what do I know, I'm just another gun nut!

Thanks Riot,

I was just trying to simplify the shortage of ammo by boiling it down to hoarding. The reasons for the hoarding are a topic among friends over a cold one. Regardless of the fears and or supply problems I believe the people responsible for contributing to this are over reacting. I know one fella who has accumulated 10,000 rounds of .45 for his 1911 alone. What the heck one guy needs that many rounds for one gun is beyond me.

I understand that the fears, whether real or perceived, cannot be stopped. This supposed “serial numbering” of ammo is of least concern to me. Just what exactly is going to be accomplished by doing this? I would have no problem stamping my “serial number” on a criminal. The whole idea, whether it is true or not, is a joke.

I called a few friends of mine while I was in the well-stocked store in Utah and told them that I had found the ammo they needed. They told me what they needed and I got it for them without profiting from it. I know that some have mentioned “capitalism” as a reason to buy the stuff and sell back here at home for up to 4 times the price but I cannot bring myself to do that. Is the guy who is selling bottled water at 10 times the price to hurricane victims a capitalist? There’s a cutoff point for everything.

I called a few friends of mine while I was in the well-stocked store in Utah and told them that I had found the ammo they needed. They told me what they needed and I got it for them without profiting from it. I know that some have mentioned “capitalism” as a reason to buy the stuff and sell back here at home for up to 4 times the price but I cannot bring myself to do that. Is the guy who is selling bottled water at 10 times the price to hurricane victims a capitalist? There’s a cutoff point for everything.

Zinger, bear in mind that the economic forces I mentioned have no morality. A person can be a complete *sshole, doing it for the wrong reasons and still be part of a positive economic process. Rising prices curbs consumption as people choose to do without, more carefully allocate their funds, or finds new venues to buy from (the internet is a great one). That price hike in one area also provides incentive for middle men to push inventory from areas of relative plenty to areas of relative shortage.

As to gouging and the personal choice whether or not to charge high prices...that is a personal thing where the individual has to make their own ethical call. However the person charging high prices has something going on, when he charges 10 times the normal price, he WILL have ammo next week while his competitor selling at normal price will be sold out by the end of the day. While the consumer appreciates the low prices...next week when he gets the unforseen chance to go to the IDPA nationals and he needs ammo immediately no matter the cost, the nice guy is no help to him.

Now the hurricane example. The person you are describing is an a$$hole to be sure. However, be sure to deliniate that he is meerly an a$$hole, there is nothing to be done other than call him that and encourage people to deny him business. The problem in modern society is that when we complain about something our busybody congresscritters immediately start thinking about laws they can pass to "fix" it. Bottom Line is that the water merchant owns that water and no one has the right to take that property from him. If the government imposes price controls on him the government is stealing the profit he would have made if he had been allowed to set his own prices. Additionally the governemnt has caused a shortage of water, since his controlled price water will be sold out in minutes and no more water merchants will bring any more in since there is no profit to be had.

So to make a short story long, I dont disagree with you Zinger on the ehtics of individuals. I would feel horrible taking money from people for water, I couldnt do it. Just remember that the market IS. Capitalism and the market is like the weather, it has no agenda, no right or wrong or ethics. It is a spontaneously originating force in humanity, no one decided one day in Mesopotamia "I will invent supply and demand!" Individuals may have thics and do bad things. The market itself is beyond that.

Now an interesting force in the price and market is the internet. It tends to stabilize prices since it instantly cross levels supply. The gun store ammo price goes up because of local supply issues. But the internet nedors represent a vast pool of ammo accesable nation wide. Shortages are mitigated and price flunctuations are lessened...however, once the internet vendors start selling out the shortage is nationwide and you really do have a problem.

Went to my local wallyworld this weekend. Still no ammo. Has not been any real inventory of ammo since the election. There was exactly two boxes of 7.62x39 at $27/box and two boxes of .40 caliber at $16/box/50rds.

Of course, they had all the Fudd ammo you could shake a stick at like .227 1/4mm LOL.

Did they have 7.5x3? I love that stuff. You really gotta raise up your seating die if you want to reload it though...

Zinger, bear in mind that the economic forces I mentioned have no morality. A person can be a complete *sshole, doing it for the wrong reasons and still be part of a positive economic process. Rising prices curbs consumption as people choose to do without, more carefully allocate their funds, or finds new venues to buy from (the internet is a great one). That price hike in one area also provides incentive for middle men to push inventory from areas of relative plenty to areas of relative shortage.

As to gouging and the personal choice whether or not to charge high prices...that is a personal thing where the individual has to make their own ethical call. However the person charging high prices has something going on, when he charges 10 times the normal price, he WILL have ammo next week while his competitor selling at normal price will be sold out by the end of the day. While the consumer appreciates the low prices...next week when he gets the unforseen chance to go to the IDPA nationals and he needs ammo immediately no matter the cost, the nice guy is no help to him.

Now the hurricane example. The person you are describing is an a$$hole to be sure. However, be sure to deliniate that he is meerly an a$$hole, there is nothing to be done other than call him that and encourage people to deny him business. The problem in modern society is that when we complain about something our busybody congresscritters immediately start thinking about laws they can pass to "fix" it. Bottom Line is that the water merchant owns that water and no one has the right to take that property from him. If the government imposes price controls on him the government is stealing the profit he would have made if he had been allowed to set his own prices. Additionally the governemnt has caused a shortage of water, since his controlled price water will be sold out in minutes and no more water merchants will bring any more in since there is no profit to be had.

So to make a short story long, I dont disagree with you Zinger on the ehtics of individuals. I would feel horrible taking money from people for water, I couldnt do it. Just remember that the market IS. Capitalism and the market is like the weather, it has no agenda, no right or wrong or ethics. It is a spontaneously originating force in humanity, no one decided one day in Mesopotamia "I will invent supply and demand!" Individuals may have thics and do bad things. The market itself is beyond that.

Now an interesting force in the price and market is the internet. It tends to stabilize prices since it instantly cross levels supply. The gun store ammo price goes up because of local supply issues. But the internet nedors represent a vast pool of ammo accesable nation wide. Shortages are mitigated and price flunctuations are lessened...however, once the internet vendors start selling out the shortage is nationwide and you really do have a problem.

Good point ChemSoldier. I suppose that I am comparing ammo to water. A natural catastrophe is not the same as people panicking because of a perceived or real threat. I always keep a cool head about these things and because of that I was able to stock my ammo up and I am in my comfort zone. I would have found it one way or another. If others are running around and panicking, well, that’s Darwinism.